As a product manager for a music/tech company in London, that is focused on ticket sales, can you guess what topic people want to talk to me about most often? If you guessed ticket scalpers, ding ding ding, you got it.

People want me to be working on some magic that kills scalpers. When I explain that the problem with the secondary ticket sales market is not so much technological as it is economical, they get mad at me.

I'll explain. It all starts on a cold winter's night in America. The land of dreams.
And ticket scalpers.

Our CTO/CEO power couple bought tickets to Lorde’s Pure Heroin Tour, specifically the Portland show at Crystal Ballroom for the 4th of December in 2013, almost 5 years ago exactly. They paid $90 per ticket. $180 total.

Fine they said, paid and went. Worth every penny.
They got their tickets. Everybody's happy.

You know how sometimes the tickets have the ticket price printed on the ticket?

That’s what is known as face value, and it is the set ticket price.
Set by management. Set by the organisers.
On their Lorde tickets, it said $10.

So the $90 they paid, is what is known as market value.
Which is way higher than the $10 dollar face value.

Quick math:
$90 market value – $10 face value = $80 dollars

$80 dollars is a significant difference.
Where did it come from & where is it going?

So we now have found $80 dollars somewhere.
Where did they come from?

They came from the massive mismatch in the price the concert organisers set, and how much the market is willing to pay. $80 dollars is a lot of money for anyone. And for two tickets, someone just made $160 dollars of this market mismatch.

Maybe it went to some fan who was tempted to resell their tickets to make $160 dollars. But most likely, it went to a ‘scalper farm’. These are the bad guys you’ve surely heard about.

It’s these hacker types who –as soon as tickets go on sale– buy them by the thousands only for you, dear reader, as a genuine fan have to go buy tickets on a secondary ticket site, often 2x or 3x the original ticket price.

Any event that sells out in 20 minutes, has had most of its tickets sold to scalpers.

So we’ve been saying this for a while, right. We look at ticket data all the time, our users ask us all sorts of questions of how to do strategy better, but everyone wants magic technology to fix this.

There is no magic technology, because this isn’t a technical problem. Even if all secondary websites would shut tomorrow, people would sell tickets on Facebook, Twitter, Craigslist. Even if the internet would shut tomorrow, there’d be guys standing outside the venue waving tickets.

The technology to support the secondary market exists, because there are legitimate reasons to resell tickets. And the secondary ticket sales market exists when there are people selling and people buying.

It’s not the technology that’s at fault here.

It’s this insane mismatch between the face value and the market value of the ticket that means there is money to be made off of the live music industry that doesn’t go back into the live music industry.

There’s only one solution. It’s obvious when you know the math. Right?
And that is to raise ticket prices. Which will be unpopular, right.

It means shows won’t sell out as quick, because the shows themselves are now carrying the risk of selling out – not the scalpers who bought up the tickets. Your best bet is actually knowing how many tickets you’re selling, and reacting to what the market is telling you.

And so. Already pissed at the media. Already crafted her icy persona for a new era.
The person with big enough balls to fully go for it.
The person to deliberately have high ticket prices from day one, is one Taylor Swift.

To meet a demand and supply problem with a demand and supply solution. The only other act that does this like this is The Rolling Stones. And they do it because they only go on like 15 shows per year or something (we’ve written about this extensively).

The media went crazy. “Still lots of ticket available for the reputation Stadium Tour”, “What is she thinking?”. 'Money-grabber' they called her, 'a flop' – “it won’t work” they all said. And you can imagine how we held our breath as we saw her tour roll out and then to see if it worked. If what we’ve been saying for a long time, worked. To kill the secondary ticket market, you gotta raise the prices (or increase the demand – but that’s a story for another time).

Why do we care so much?
Because we’ve bet our whole product on it. We bet that your only play as an organiser is to know your market and react to the market. We bet that your best bet is actually knowing how many tickets you’re selling, and reacting to what the market is telling you.

And that is not even with everyone purchasing tickets at the advertised higher price. Taylor's Verified Fan programme powered by Ticketmaster offered pre-registered fans to buy tickets at a 'normal' price before they were put in general sale at the new high price.

But also higher ticket prices meant slower ticket sales. As inventory still existed in some markets, the prices could be lowered again to match the demand. What we're seeing here is the first bold move to move to a more dynamic ticket price strategy, where the tour management is using ticket prices very strategically.

So we're already seeing this for the most highly anticipated tours of 2019, many of which have already gone on sale – tickets are definitely higher for these A-list acts than they have been before.

A-listers who've already put their tickets on sale, haven't sold out yet and primary tickets are often priced in the low hundreds. So it will be interesting to see how 2019 will play out – now that Taylor Swift's strategy has paid off in the way that it did.

The PROMOGOGO team writes articles on ticket sales, data, strategy and audiences.